Wipro Q4 Results: Robust Demand Aids Revenue, Profit; Higher Attrition Drags Margin
The Bengaluru-based IT company’s revenue increased 2.7% sequentially to Rs 20,860 crore in the quarter ended March.
Wipro Ltd.’s revenue rose in the fourth quarter, driven by its software services segment, but margin remained under pressure.
The Bengaluru-based IT company’s revenue increased 2.7% sequentially to Rs 20,860 crore in the quarter ended March, according to its exchange filing. That compares with the Rs 20,821.3-crore consensus estimate of analysts tracked by Bloomberg.
Its revenue from IT services jumped 3.1% over the preceding quarter to $2,721.7 million. It grew 3.1% in constant currency.
That meets its own guidance of $2,692-2,745 million for the fourth quarter, translating into a revenue growth forecast of 26.9-27.5% for the fiscal ended March 2022.
For FY22, the company saw its revenue grow 27.7%.
Wipro expects 1-3% sequential revenue growth, translating into 16-18% year-on-year basis in constant currency, said Thierry Delaporte, managing director and chief executive officer. “We expect to grow in double digit for FY23 as well. We have grown over 3% continuously in the last six quarters.”
Margin, he said, are expected to grow at 17-17.5% in the medium term. “For the next two-three quarters, however, we will see slightly lower margin because of the investments we have made.”
The company expects revenue from IT services business to be in the range of $2,748-2,803 million for FY23.
Wipro Q4 FY22 Highlights (QoQ)
Net profit rose 3.98% to Rs 3,087.3 crore, compared with the Rs 3,005-crore estimate.
EBIT fell 4.82% to Rs 3,402.9 crore.
Margin contracted 130 basis points to 16.3%.
12-month trailing attrition rate rose to 23.8% from 22.7% at the end of the third quarter.
Quarterly annualised attrition rate has moderated by 500 basis points, said Thierry Delaporte, managing director and chief executive officer at Wipro. “We doubled our fresher intake for FY22 as compared to previous year. Our plan is to double this again in FY23.”
The IT services company has decided to increase the frequency of promotion cycle for 70% employees in junior bands to quarterly basis.
Segment-Wise Revenue
Revenue from IT services segment rose 3.1% sequentially to $2,721.7 million.
Wipro added 37 large deals worth $2.3 billion in FY22.
The company has signed a definitive agreement to buy U.S-based consulting firm Rizing Intermediate Holdings Inc. for $540 million (about Rs 4,100 crore) as it continues to hunt for acquisitions to push growth. Wipro has acquired six companies since 2021.
Wipro’s mainstay BFSI and manufacturing verticals have also grown during the reported quarter.
Shares of Wipro fell 2.63% before the results were announced compared with a 0.83% decline in the benchmark Nifty 50.